Corruption seen in former Hungarian film fund

Investigation reveals dubious practices

MOSCOW — An investigation into the finances of the former public film fund in Hungary that collapsed two years ago with multimillion-dollar debts has exposed widespread corruption.

Leaked documents from Hungarian government financial oversight office KEHI reveal a web of fictitious contracts, dubious perks and duplicate invoicing practices. The investigation into financial affairs at the Hungarian Motion Picture Public Foundation ( MMKA), published on Hungarian anti-corruption website Atlatszo, suggest that at best lax financial control was widespread at the organization.

Foundation employees are shown to have received as much as $45,000 in bonuses, false employment contracts, payment for unnecessary reports and splitting awards and commission fees among themselves.

Among those named in the report are Ferenc Grunwalsky, a director and producer who headed the MMKA between 2003 and 2009 and Aniko Navai, a Los Angeles-based journalist and member of the Hollywood Foreign Press Assn. who for many years represented the Hungarian film industry in Hollywood.

Navai is said to have billed twice for the same work involved in repping Hungarian films at a location tradeshow in 2009, charging both the MMKA and Filmunio, Hungary’s international film promotion body that was part of the organization.

After the collapse of MMKA in 2010 its functions were taken over by a new body, the Hungarian National Film Fund, under the leadership of Budapest-born Hollywood film producer Andy Vajna.

Vajna, who finally secured control of assets owned and managed by MMKA earlier this year, when the foundation was formally wound up, told Variety that the report did not surprise him. “MMKA was a mess, and my job is not to investigate it but to resolve the problems (in Hungarian public film funding) and build a new future,” Vajna said.

Agnes Havas, CEO of the new fund, told Variety that she had read the report that was leaked over the Internet a year ago when it was first issued.

The findings had helped her and Vajna draft policy for the new Hungarian Film Fund, but she stressed that her office wasn’t responsible for the leak.

“We have nothing to do with things that happened in the past. When the Hungarian Film Fund started, with the help of Andy Vajna we were able to get government support to solve the financial problems of the MMKA.

“We were able to repay debts to the banks. We paid producers. We were able to close completely with the past. This means we were able to start a new life for film support in Hungary.”

Havas stated that the Film Fund had no part in releasing the investigative report detailing MMKA’s problems.

Gyorgy Such, head of Hunnia Filmstudio and producer of “The Notebook” — one of a raft of films funded by Vajna’s new fund, said: “The MMKA was not so transparent, and let’s just say a lot of money was going out to different people close to the president. This (based on the report) seems to be a fact.”

A prominent producer and distributor, who spoke on condition of anonymity, was more critical.

“There were so many problems with the MMKA. It is well known that they distributed millions of (Hungarian currency) forints without any agreements, and always among their buddies.”

Neither Navai or Grunwalsky, among those named in the leaked report, could be reached for comment.